Your attention is directed to a recent ruling
by the Department's General Counsel which reads, in part, as follows:

"You are advised that the placement
of automobile liability or physical damage coverage by an excess line broker with an unauthorized
insurer would constitute a violation of Section 122 of the Insurance Law and Regulation 41
of the Insurance Department where such coverage is available in the desired amounts either
directly from an authorized insurer or through the New York Automobile Insurance Plan.

Section 63(2)(b) of the Insurance Law requires
the New York Automobile Insurance Plan, upon request of an applicant, to assign for coverage
insurance for loss or damage to an automobile up to $ 5,000, subject to
a deductible of not less than $ 100. The plan presently is not accepting applications for
physical damage coverages with deductibles in excess of $ 100 although it is accepting applications
for coverage up to $ 5,000. Section 63(2)(a) of the Insurance Law
likewise requires the Plan to assign liability coverage up to $ 50,000/$ 100,000.

The mere fact that higher deductibles are obtainable from unauthorized insurers
or that the premium rates are lower does not furnish a proper basis for placement of coverage
with unauthorized insurers."

Please acknowledge receipt of this directive to Theodore R. Ayervais, Deputy Superintendent and General Counsel, 123 William Street, New York, N.Y. 10038.